Fluor details contract award for Canada Kuwait Petrochemical Alberta complex

Fluor Corp. has confirmed details of its scope of work on an earlier awarded contract by Canada Kuwait Petrochemical Corp. (CKPC), a joint venture of Pembina Pipeline Corp., Calgary, and Petrochemical Industries Co. KSC (PIC) of Kuwait, for a major unit at CKPC’s proposed 550,000-tonne/year integrated propane dehydrogenation (PDH) and polypropylene (PP) complex in Sturgeon County, Alta. (OGJ Online, May 16, 2017).

Heartland Canada Partners—a 50-50 partnership between Fluor Canada Ltd. and Kiewit Construction Services ULC—will provide engineering, procurement, and construction (EPC) on the proposed PDH unit, Fluor said.

While it did not disclose a value of the order, Fluor said it expects to book its portion of the contract value during this year's first quarter. 

The contract award follows HCP’s collaboration with CKPC throughout the process to de-risk the project, according to the service provider.

Engineering on the project has begun, and construction is scheduled to begin late this year, with mechanical completion of the new PDH unit planned for second-half 2023, Fluor said.

Upon announcing the initial contract to HCP, Pembina did not disclose a specific value of the lump-sum EPC contract, but the operator did confirm that the contract secures about 60% of CKPC’s entire cost of the previously projected $4.5-billion PDH-PP complex (OGJ Online, Jan. 8, 2020).

With the EPC contract for the PDH unit providing 60% cost certainty for the project, Pembina also said it has revised its proportionate share of the capital cost of the PDH-PP complex—including its 100% share of directly-owned supporting facilities—to $2.7 billion from its earlier estimated $2.5-billion net investment in February 2019. The revised capital cost estimate, however, does not affect Pembina's previously announced 2020 capital budget, the operator said.

Once completed, the proposed PDH-PP complex will consume 23,000 b/d of Alberta-produced propane sourced from Pembina’s Redwater fractionation complex as well as other regional facilities.

Pembina—which said CKPC plans to enter the entirety of the PDH-PP complex into commercial service during second-half 2023—also confirmed the contractor selection process for the complex’s PP unit remains ongoing.

CKPC previously let a contract to Honeywell UOP LLC to license its proprietary C₃ Oleflex technology for the complex’s production of polymer-grade PP (OGJ Online, July 11, 2017).

CKPC also awarded Jacobs Engineering Group Inc., Dallas, a contract to provide front-end engineering design services for the complex (OGJ Online, Dec. 5, 2017).